US Equity Indexes Rise as Crypto Rebound, Improving Fed Rate-Cut Bets Help Lift Sentiment

Adam

Summary:

US stocks rose on light volume as crypto rebounded and Fed rate-cut odds strengthened. Treasury yields eased, sentiment improved, and Boeing jumped after signaling higher jet deliveries.

US equity indexes rose amid thin trading volumes as a rebound in cryptocurrencies and a further improvement in the odds of a third consecutive interest-rate cut helped risk sentiment remain positive on a data-light Tuesday.

The Nasdaq Composite rose 0.6% to 23,413.67, with the Dow Jones Industrial Average up 0.4% to 47,474.46 and the S&P 500 higher by 0.3% to 6,829.37. Technology, industrials, and communication services led the gainers. Energy and materials were among the decliners.

Nasdaq's trading volume after midday was 6.56 billion, compared with a daily average of about 9.72 billion. The figures for the S&P 500 were 2.96 billion and 5.47 billion, respectively. For the Dow, the data stood at 510.9 million, versus 520.8 million.

Bitcoin jumped 6% to $91,806, and Ether advanced 7.3% to $3,007.

US Treasury yields fell, with the two-year yield down 2.9 basis points to 3.51%. The 10-year yield edged slightly lower to 4.09%, retreating from a surge to 4.11% on Monday.

The 30-year yield on Japanese government bonds set a record intraday high, but benchmark borrowing costs ended the day lower, following a well-received debt auction, The Wall Street Journal reported. Japanese yield gains could dampen the country's demand for US Treasurys and disrupt the carry trade, in which investors borrow cheaply in yen to make leveraged bets.

Nasdaq stocks and cryptocurrencies are reportedly among the main beneficiaries of the carry trade.

Meanwhile, markets are now pricing an over 89% probability that the Federal Reserve, which has already delivered two back-to-back cuts this year, will reduce its benchmark lending rate by a quarter percentage point on Dec. 10, according to the CME FedWatch tool. The likelihood was more than 86% a day ago, over 85% a week earlier, and 63% a month ago.

The Organization for Economic Cooperation and Development revised up US economic growth forecasts to 2.0% from 1.8% this year, and to 1.7% from 1.5% next year. These projections, however, mean that the OECD expects growth to fall from last year's 2.8%.

The RealClearMarkets sentiment index, the first consumer measure for December, rose to 47.9 from 43.9 in November, a print showing pessimism. Raghavan Mayur, president of TechnoMetrica, which compiles the survey, said that the end of the government shutdown lifted confidence, while headwinds include inflation, tariffs, and high interest rates.

Redbook US same-store sales last week jumped by 7.6% from a year earlier, following a 5.9% increase in the prior week, amid higher sales on Black Friday and the weekend following Thanksgiving. Through the fourth selling week for November, sales were up 6.4%, missing the 6.7% target.

Online spending at this year's Cyber Monday rose more than projected to $14.25 billion, Adobe (ADBE) Analytics' holiday shopping data showed. In October, Adobe forecast Cyber Monday spending would grow 6.3% year-over-year to $14.2 billion. Cyber Monday e-commerce sales totaled $13.3 billion last year.

In company news, Boeing (BA) shares surged 10%, the top gainer on the S&P, after Chief Financial Officer Jay Malave said deliveries of 737 and 787 jets will increase next year.

Source: MT Newswires

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